CELEBRITY SPECIAL SITUATIONS FUND I, L.P. (formerly known as DONGLIN SPECIAL SITUATIONS FUND I, L.P.) v. CHINA LINKAGE INTERNATIONAL LTD

CELEBRITY SPECIAL SITUATIONS FUND I, L.P. (formerly known as DONGLIN SPECIAL SITUATIONS FUND I, L.P.) v. CHINA LINKAGE INTERNATIONAL LTD

The court accepted the explanation of inadvertence and found there was some other sufficient cause and that it was just and equitable between the Petitioner and the Company (and its contributory) to grant the extension; the Company bore primary responsibility to register and should not benefit from its failure; the discretionary power under s346 was exercised in favour of the Petitioner with protective provisions for other creditors.

Citation
[2018] HKCFI 63
Parties
Petitioner (chargee): Celebrity Special Situations Fund I, L.P. (formerly Donglin Special Situations Fund I, L.P.); Respondent (company): China Linkage International Limited; Contributory (shareholder Opposing Application): China Asia Strategic Capital Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 January 2018
Case Number
HCCW120/2017
Procedural Posture
Companies (winding Up) No. 120 of 2017; Application Under Companies Ordinance to Extend Time to Register Charge / Chamber Hearing of S346 Application for Extension of Registration Period; Provisional Liquidators Appointed; Winding Up Petition Adjourned
Outcome
Application granted; extension of time to register the charge ordered and costs order nisi made against opposing contributory
Legal Topics
Registration of Charges, Extension of Time Under S346, Effect of Non Registration (s337), Money Lenders Regulation Defence (mlo), Provisional Liquidation, Discretionary Relief and Inadvertence
Source Language
EN
Company Law Insolvency Law Civil Procedure Financial Regulation Registration of Charges Extension of Time Under S346 Effect of Non Registration (s337) Money Lenders Regulation Defence (mlo) +2 more

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Parties

Celebrity Special Situations Fund I, L.P. (formerly Donglin Special Situations Fund I, L.P.)

Petitioner (chargee)

China Linkage International Limited

Respondent (company)

China Asia Strategic Capital Limited

Contributory (shareholder Opposing Application)

Procedural Posture

Companies (winding Up) No. 120 of 2017; Application Under Companies Ordinance to Extend Time to Register Charge / Chamber Hearing of S346 Application for Extension of Registration Period; Provisional Liquidators Appointed; Winding Up Petition Adjourned

Legal Issues

  1. 1 Whether court should exercise its discretion under s346 to extend the time for registration of a charge dated 1 November 2015
  2. 2 Whether the non-registration amounted to accidental/inadvertent failure or other sufficient cause under s346(3)
  3. 3 Whether extension should be refused because company is in liquidation or provisional liquidation (Re Ashpurton and practice)

Ratio Decidendi

The court accepted the explanation of inadvertence and found there was some other sufficient cause and that it was just and equitable between the Petitioner and the Company (and its contributory) to grant the extension; the Company bore primary responsibility to register and should not benefit from its failure; the discretionary power under s346 was exercised in favour of the Petitioner with protective provisions for other creditors.

Court Disposition

Application granted; extension of time to register the charge ordered and costs order nisi made against opposing contributory

Orders

  • Order in terms of paragraph 1 of the Petitioner's summons dated 19 July 2017 granting an extension of time to register the charge dated 1 November 2015
  • Order nisi that the costs of the said summons be paid by the opposing contributory (China Asia Strategic Capital Limited) to the Petitioner, to be made absolute 14 days after the handing down of the decision